The UK Referendum is a Bad Idea; Voting to Leave Would Make It Worse

The British referendum is based on (at least) two bad ideas. The first is that the popular legitimacy of a referendum can restore the sovereignty of the British parliament. The Leave campaign believes they can take power from Brussels and give it back to Westminster. That is a fantasy. The British parliament will be more constrained and less effective if the UK leaves. The second bad idea is that referendums are more democratic than acts of parliament (which is the kind of decision that brought Great Britain this far in its relationship with Europe). By giving the people the chance to speak their mind on a yes-or-no (in-or-out, remain-or-leave) question, we can discover what they really want. That is not how people work. Real people prefer trial and error. Real people also like to delegate responsibility for making complicated decisions. This matters because the two bad ideas combine to make the worst of all possible worlds. Britons who vote to Leave will discover that they have made a terrible mistake only to learn that there is no easy way to fix it.

Let’s start from first principles: popular referendums do not protect parliamentary sovereignty; they usurp it. When David Cameron announced his intention to hold an in-or-out referendum, he made it clear that the goal was for the British people to have their say and finish the debate. What that means in principle is that future parliaments should not revisit the matter. The people will have spoken and so parliament’s hands are tied. The fact that the people elect members of parliament does not trump the voice of the people themselves. The fact that many of ‘the people’ will soon pass onto the next life and so leave this constraint on future generations who haven’t yet learned to talk doesn’t matter either. As if to underscore this point, David Cameron tried to win concessions from Europe that would be similarly permanent. Britain’s opt-out from the European goal of an ‘ever closer union’ is ‘irrevocable’, for example. Future parliaments should not revisit that issue either. This whole debate has made the scope for parliamentary action narrower and not wider. Current politicians have tricked the people into usurping the sovereignty of Westminster.

The situation is not worse under Europe. It is better. Nothing that has been agreed about Europe by past British parliaments is irrevocably binding – or meant to be so. The same is true for every other country participating in the European project. If you needed any reassurance on that point, just look at how much attention the current referendum is getting elsewhere. Other European leaders know that the British government can take the United Kingdom out of the EU. So does the United States government, as President Barack Obama made clear during his recent visit. None of these political leaders thinks it would be a good idea for Great Britain to leave Europe, but they all respect that it is within the power of the British government to do so. The same is not true for an American state. Those states exercise sovereignty – and some, like Texas, flirt at times with secessionist rhetoric – but they are not sovereign in the same way that the United Kingdom is as an EU ‘member’ state.

The notion of ‘membership’ is important in that respect. Short of expulsion, membership is largely a self-enforcing activity. When the British legal system enforces European rules, they do so on the basis of British legal commitments made by Westminster and not as the agents of some higher power. There is no European enforcement mechanism that can override British institutions. And if British institutions choose to ignore European legal requirements there is little that the European Union can do about it. The EU could threaten to expel Britain in order to bend the British government to its will, but only the British government can decide whether and how to respond to that threat. If the recent example of Poland is any illustration, then expulsion – from the room and not even from the Union – is unlikely to happen.

My point is not that national governments can and should ignore their European commitments. Rather it is that commitment to Europe is an act of self-interest rather than the result of some kind of enforcement. In that sense, the threat of expulsion is not only unlikely but also unnecessary (although some observers of democratic backsliding in some of the newer member states are likely to disagree with me on this point). Most governments accept the judgements of the European institutions. They may not like the specific decision, but they respect that some institution has to render judgement when there is disagreement over whether there are rules in a given situation, what the rules mean, and how they should be implemented. David Cameron conceded this point explicitly in his Bloomberg speech. The European Union does not constrain British sovereignty; British institutions exercise sovereignty to work within European constraints.

This self-restraint is rational insofar as participation in European institutions makes parliamentary activity more effective. No doubt many Members of British Parliament will argue that is not the case. They will also complain that some enormous percentage of British laws are drafted in Brussels and not at Westminster. And they will highlight one or two key areas where they would do things differently if freed from European constraints. There is a complicated subterfuge in this line of argument that needs to be unpacked to be considered. Let me do that in four steps.

First, the real effect of the Leave campaign would be to overturn past parliamentary decisions. Successive British parliaments have delegated rule-making authority to European institutions in which they have also demanded representation. Successive British parliaments have also participated in a series of sweeping reforms to the procedures for how those European institutions make rules. And successive British parliaments have converted European rules into national legislation. At each step along the way, opponents of Europe have had the opportunity to protest both inside and outside the Houses of Parliament. Sometimes those opponents of Europe have won concessions and sometimes they have blocked change. Participation in the euro and the Schengen area are two examples. Sometimes, however, those opponents of Europe have either failed to influence the conversation or they have had little real reason to complain. Here we might put much of the single European market. So the difference between the world we live in today and a world without Europe boils down to those policy areas where opponents of Europe wanted to do something different and yet failed to sway a majority of the British parliament. Now they want to reverse those defeats.

Second, many of those decisions would have come out similarly – at least in broad terms – even without European integration. Remember, both the Schengen Area and the euro are off the table. So the focus is on the Single Market. All markets have regulations and most market regulations are the result of competition across jurisdictions. Moreover, the British government is involved in a large number of international organizations that share ‘best practice’ for how markets should be regulated, how different regulations interact, and how much it costs to do business across different regulatory jurisdictions. This is the information that policymakers use to ‘modernize’ the rules that define the domestic marketplace. As the world becomes increasingly interconnected through market activity, that modernization involves increasing amounts of information gathered from the experience of other countries and filtered through international forums like the European Union. The Leave campaign is quick to admit that practice will not change if the UK were to leave the EU. That is much the same as admitting that a lot of the actions of the British parliament would start outside of London even if the EU did not exist. The question is whether those actions would have been as effective in representing the British national interest.

Third, smaller markets have to accept the rules set by larger markets if they do not want to put their firms at a competitive disadvantage. Here you might think of weights and measures. There was a time when every ‘market town’ had a town hall that provided examples of the standard weights and measures that applied for lawful transactions. That kind of local idiosyncrasy was one of the first victims of market integration. Every market town also had its own ‘time’ that pivoted around the sun’s apex at noon. That kind of idiosyncrasy has disappeared as well. Of course there are some holdouts. The United States still uses a form of imperial weights and measures and North Korea recently introduced its own time zone, setting the country’s clocks back by thirty minutes. Most of the rest of the world makes do with the metric system and time zones set at hourly increments and centered on Greenwich. If you dig into the details, moreover, you will see that a lot of market regulations and voluntary industrial standards show the same pattern of convergence. Moreover, the pattern is set by the largest markets and not necessarily the cleverest regulators or standard setters (unless some clever innovation is quickly adapted by a large market). This means that any good British regulatory innovation is likely to be expensive for British firms unless the British government can find some way to win allies for its wider adoption. It also means that a lot of British regulation is going to be determined by the relative costs of doing business.

Fourth, the best situation from a regulatory perspective is to have a large market for innovation and competition and to use that large market to build a coherent regulatory framework to achieve two complementary objectives: policymakers want to adopt the best regulations given current practice and they want to adapt to the best regulations that emerge in the future. That challenge is bet met through international cooperation because almost no regulatory jurisdiction is big enough, innovative enough, and flexible enough to do everything on its own. Moreover, this is as true for the United States as it is for the European Union. That is why governments on both sides of the Atlantic pushed for a trans-Atlantic trade and investment partnership. They knew that this kind of regulatory cooperation would be more challenging than a standard trade agreement. The current controversy over the agreement is less of a surprise than many pretend. But policymakers also saw that some kind of transatlantic trade and investment partnership is the only way to get what you want from market regulations in an increasingly integration global economy. The Leave campaign wants to move in exactly the opposition direction. That result will be to force the British parliament into accepting rules made elsewhere without any input from the United Kingdom or to abandon the goal of national competitiveness.

If you add this all together, the Leave campaign will constrain the sovereignty of Westminster, it will overturn regulatory decisions that Euroskeptics already fought in parliament and lost, it will rob the parliament of influence, and it will threaten the competitiveness of British firms. By contrast, the Remain campaign will promote the British interest by placing trust in elected representatives to work with Britain’s closest allies in order to project shared values across a global market. That is the choice Britons face and yet it is not a choice they should have to make.

Instead, they should vote to remain in the EU and to give responsibility for European policy to members of parliament and government. Then they should vote – not just once, but every five years – to hold those politicians to account for their actions. In other words, by choosing to remain, the British people should make a clear choice for representative democracy. This way Britons can not only preserve the sovereignty of Westminster but they can also make sure that parliament remains responsive to the needs of future generations. Most important, they can ensure that the British people can benefit from the best market regulations that the world has to offer (rather than forcing their politicians to invent everything on their own).

The choice is simple. Leave means anachronism, idiosyncrasy, and ineffectiveness; remain means accountability, sovereignty, and progress. Once you strip out all the bad ideas at the heart of the Leave campaign, it hardly looks like a choice at all.

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[…] simple question. Start with the referendum. That was a decision of the people. In Britain, however, it is parliament that is sovereign. The people only got their referendum because parliament authorized it as a matter of consultation. […]